Sweetgreen, the "better for you" fast-casual salad chain, is riding a wave of positive momentum. Their recent Q1 2024 earnings call showcased impressive growth in revenue, margin expansion, and a path to adjusted EBITDA profitability. While analysts are understandably focusing on innovations like the Infinite Kitchen and the introduction of steak to the menu, a quieter detail tucked within the transcript may be hinting at a powerful, yet overlooked, driver of Sweetgreen's success: kiosks.

During the Q4 2023 earnings call, Mitch Reback, Sweetgreen's CFO, casually mentioned that the two existing Infinite Kitchen locations, both equipped with kiosks, were seeing average checks 10% higher than their respective markets. This detail, while seemingly insignificant, was repeated in the Q1 2024 earnings call. Could kiosks be the silent heroes behind this check lift?

The power of kiosks in driving higher average checks isn't a new phenomenon. Across industries, from fast food to airports, kiosks have proven their ability to encourage upselling and larger orders. The reasons are multifaceted. Kiosks offer a visual menu, often showcasing tempting add-ons and premium options. They eliminate the pressure of human interaction, allowing customers to browse and customize their orders at their own pace. This sense of control and the absence of judgment can lead to customers feeling more comfortable splurging on extra ingredients or larger portions.

While Sweetgreen hasn't explicitly attributed the check lift to kiosks, the correlation is compelling. The two Infinite Kitchen locations, the only locations currently featuring kiosks, are consistently outperforming their market peers in terms of check size. If this trend continues, it could have profound implications for Sweetgreen's future growth strategy.

Let's look at the potential impact. A 10% increase in average check, extrapolated across Sweetgreen's entire system, could translate to a significant boost in revenue. Based on their Q1 2024 revenue of $157.9 million, a 10% check lift could represent an additional $15.8 million in revenue for that quarter alone.

Hypothesis:

Kiosks are a significant, yet under-recognized, contributor to Sweetgreen's higher average checks.As Sweetgreen deploys more kiosks, either through new Infinite Kitchen locations or retrofitting existing stores, this check lift could drive substantial revenue growth.

Supporting Data:

10% higher average checks at Infinite Kitchen locations (the only locations with kiosks) compared to market peers. (Source: Sweetgreen Earnings Calls)Potential for an additional $15.8 million in revenue per quarter based on a 10% check lift across the entire system. (Source: Sweetgreen Q1 2024 Earnings Release)

Sweetgreen's Financial Performance

The table below showcases Sweetgreen's Key Performance Indicators (KPIs) from the last two quarters. This data highlights the company's impressive growth trajectory, further strengthening the hypothesis that kiosks are playing a significant role in driving higher average checks and revenue.

Projected Impact of Kiosk Deployment

The chart below illustrates the hypothetical impact of kiosk deployment on Sweetgreen's average check size. Assuming a consistent 10% check lift across the system, this visualization emphasizes the potential revenue growth associated with the wider adoption of kiosks.

Sweetgreen's commitment to innovation is evident in their pursuit of automation and menu expansion. However, the potential of kiosks to quietly revolutionize their check size and drive revenue growth shouldn't be underestimated. As the company continues to optimize its operations and explore new store formats, the strategic deployment of kiosks could be a key ingredient in their recipe for long-term success.

"Fun Fact: Did you know that Sweetgreen was founded by three college friends who were frustrated by the lack of healthy and convenient food options near their campus? Their first location was a tiny 560-square-foot space in Georgetown, Washington D.C. Talk about humble beginnings!"